Frequently Asked Questions
What is Stamp Duty?
Stamp duty is a government tax on certain transactions. You generally need to pay stamp duty when you buy a motor vehicle, insurance policy or real estate. Stamp duty on a property can also be known as “land transfer duty”. The rules vary from state to state.
The amount of stamp duty that applies to a transaction varies depends on where you live, the type of transaction taking place and the value. In some circumstances, you may be able to get a concession or exemption from paying stamp duty. To find the value of stamp duty on a transaction use our
Stamp Duty Calculator or call us on (02) 8313-8400.
What sort of loans and finance does My Finance Agent offer?
We offer a wide range of financial lending services. You can find all of the ways we can help here on Our Services page.
If you're looking for something else, please contact our team on 02 8313 8400.
Can I apply for a loan if I am not an Australian resident?
Yes. While many lenders will not lend to non-residents, there are a good number that will.
In most cases your eligibility will depend on requirements, such as:
For more information, speak to us on (02) 8313-8400.
The kind of visa you hold
Who is applying for the loan (just you or you and a partner?)
Your credit score
Your savings and assets
The size of your deposit or Loan to Value Ratio (LVR)
Will a poor credit rating affect my loan application?
A poor credit rating does not necessarily mean you can't get a loan. Your credit rating gives lenders an indication of the kind of borrower you may turn out to be. Importantly, if you have a good credit rating you may be offered more loan options and better terms.
Your credit rating isn’t the only factor a lender will take into account when considering your application. They will also look at the amount of credit you have used over time, how reliable you are at meeting your commitments and any recent changes that may have affected your financial situation.
For more information about creditworthiness, call us on (02) 8313-8400.
What is Lenders Mortgage Insurance?
Lenders Mortgage Insurance (or LMI) protects the lender in the event that you stop paying your loan repayments. Similar to an insurance premium, if there is a shortfall between how much you owe on the loan and how much the lender recovers when the property is sold, LMI covers the differs.
However, you must remember that LMI is there for your lender’s protection. It does not provide you, the borrower, with any protection, even though you pay for it.
LMI can cost anything from a few thousand dollars to tens of thousands of dollars. Here's an example:
To learn more about LMI, speak to us on (02) 8313-8400.
$700,000 house with a 5% deposit = $35,000
You borrow 95% = $665,000 home loan
Your LMI cost (estimate only) = $29,990
How is loan interest calculated?
When you take out a loan, it comes with an annual interest percentage rate or APR. Your lender takes the balance of your loan and multiplies it according to that rate to calculate the interest for each monthly instalment.
For example, if you take out a $100,000 loan, your principal starts at $100,000. If your loan is at 3.00 per cent per annum interest rate, you're paying $3.00 annually for every $100 you owe. With an interest-only loan, your principal will stay the same ($100,000), whcih means you would pay $3000 in interest charges annually.
But with a principal and interest (P&I) loan, your repayments will gradually reduce your loan balance usually decreases over the course of the year, you won't pay 3.00 per cent of $100,000, but a slightly smaller amount. That's because interest is calculated based on the balance each month.
To determine the loan interest on a loan amount use our handy
What's the difference between a home loan offset account and a redraw facility?
Both are designed to give mortgage borrowers financial flexibility, as well as reducing interest charges.
An offset account operates like an everyday transaction account. It gets its name because the daily balance is "offset" against your home loan balance. Mortgage interest is charged against this reduced amount, rather than the full outstanding balance of your home loan.
A redraw facility lets you access any extra repayments you've made on your home loan. You can deposit and withdraw funds from a redraw facility, but it is not designed to be used for everyday transactions. It sits within your home loan and often comes with rules around how much and often you can make withdrawals.
There are pros and cons to both approaches which our lending specialists would be pleased to go through with you.
How long does it usually take to settle on the loan?
It generally takes between one to 4 months for a loan to settle – this is what’s known as the ‘settlement period.’
It begins on the day the contract of sale is signed and ends on settlement day (the date when ownership is officially scheduled to change hands).
The exact length of the settlement period is something that’s agreed between you and the seller and is outlined in the contract of sale.
What is a guarantor?
A guarantor home loan can be a way to get into the market sooner.
That’s because a guarantor, in most cases a family member, offers equity in their own home as additional security for your loan. The guarantor doesn’t give you or the lender any money. However, they will have to accept the obligations associated with entering into a guarantee and you will still need to make the repayments.
A guarantor home loan can also be a way to avoid the cost of lenders mortgage insurance (LMI). It’s a saving that can be worth thousands of dollars.
Importantly, the guarantor’s security doesn’t cover the entire loan amount, just a portion of it. Usually the amount needed to reduce your loan-to-value ratio (LVR) to 80%. The guarantee is limited to this amount. If the security guarantee reduces your LVR to 80%, you won’t pay Lenders Mortgage Insurance.
I am on JobKeeper can I apply for a loan?
Some lenders, especially many of the major banks, have said they won’t accept a loan application relying on JobKeeper payments. You may, however, still qualify for a home loan while you’re receiving JobKeeper payments with some lenders, so long as you’re working regular hours and continuing to receive your regular income.
If you’ve had your hours cut so that you’re receiving less take-home pay, a lender will assess your application based on the lower salary.
In cases where a lender will consider application of JobKeeper Payments, the following criteria must be fulfilled:
* A current payslip with evidence of JobKeeper payment and a prior payslip with your previous income.
* A letter from your employer confirming the circumstances of any change in income.
* There must be evidence of your salary being received in your bank account
To determine your eligibility, contact one of our loan specialists on 02 8313 8400.
Do I need home loan insurance for my new property purchase?
It’s not a legal requirementto obtain home loan insurance, however, your lawyer or conveyancer will usually recommend you insure your home (or investment property) when you exchange signed copies of the purchase contract with the seller.
Also, most mortgage lenders require you to take out insurance before the loan becomes unconditional.
I am wanting to renovate my house - can I get a loan?
There are a number of ways you can fund your renovation, depending on the size of the project and your available funding.
1. Home equity loan - this is the most common way people borrow money when they want to renovate. It involves borrowing against the current value of your home, before any value-adding renovations. Usually borrow up to 80% of its value, if you own it outright.
2. Construction loan - similar to a home equity loan, except the lender will take into account the final value of your home after the renovation.
3. Line of credit - ideal for ongoing or long-term renovations. When you apply, you can establish a revolving credit line that you can access up to your approved limit. You only pay interest on the funds you use and, as you pay off your balance, you can re-borrow the unused funds without reapplying.
4. Homeowner mortgage - this may be a good option as you can spread the cost over a long period of time, a good option if you are planning to completely transform your home with a major makeover.
5. Personal loan - if you're making minor renovations, personal loans are usually capped at around $30,000. This might be suitable, but interest rates on personal loans are higher than on home equity loans.
6. Credit cards - might be suitable for very small renovation projects as interest rates are usually much higher than on mortgages. For a very small project, avoiding a loan establishment fee may be cheaper than applying for a loan.
For more information, call our loan specialists on 02 8313 8400.
What documents do I need to provide for my loan application?
This is a general checklist, so some of the documents may not apply to you. Your My Finance Agent mortgage broker will confirm which documents you need.
* Proof of Identification ~ The Australian government laid out a personal identification system called 100-point check, where they’ve assigned a specific number of points to all the major personal identification documents to prevent cases of fraud. The idea, as far as mortgage approval goes, is that consumers should be able to provide at least 100 points worth of identification to fend off any doubts of mistaken/stolen identity or illegally borrowing money.
* Proof of Employment and Income ~ A regular source of income is a must if you’re looking for a pre-approved mortgage. You have to show that you are steadily, consistently employed: typically by remaining an employee of the same company for a certain amount of time, and that you are paid regularly. For those who are self-employed, things might be a little different, as you'll have to prove you’re financially stable by showing documentations of your business and/or freelance activities despite not being an ordinary employee.
* Proof of Current Debts ~ Lenders take pre-existing debt into consideration when deciding if you are an ideal candidate for a home loan. As such, billing statements from credit cards and other loans should be submitted so that the lender will have a bird’s eye view of your expenses.
* Proof of Assets ~ Make sure to give your bank a heads-up if you own other assets. If you happen to have real estate properties, you can provide a council rate as an evidence of your ownership.
* Extra documents ~ If you’re an eligible first home buyer, it will help to have your First Home Owner Grant application completed. If you’re applying for a home loan with a guarantor, your guarantor will also have to provide all documentation for their identification, income, assets and liabilities. If you already have insurance on the property, you’ll want a copy of your insurance policy. If you’ve already had a valuation done on the property, have the valuation report at hand.
IMPORTANT - While documentation requirements vary from lender to lender, being prepared will make your home loan application process smoother in the long run.
What bank fees am I expecting to pay on my loan?
There are several fees you may encounter in your home loan application and most of them should be paid before the bank accepts your submission. To avoid getting bill shock, familiarise yourself with these fees and know what they are for.
* Application Costs - This charge can have several different names, typically establishment, start-up, or setup fees. Either way, these fees are a one-off charge at the start of your home loan application and can range from $150 to $700, depending on the amount of the loan.
* Valuation Fee - Valuation charges cover the cost of having your property assessed by a third party. This fee can vary depending on the location of the property, but typically costs between $100 to $300. This cost is typically quoted on application. A valuation of the property helps lenders ascertain if the amount you are borrowing and the size of your down payment are appropriate.
* Conveyancing Charges - Conveyancing is an important part of the loan settlement process and fees surrounding it are usually estimated by the conveyancer.
* Government & Legal Costs - These fees are charged by and payable to the government to cover stamp duty on the mortgage. These fees vary depending on whether you are a first-home buyer, which state you are in, and the cost of the property. Legal Costs cover all services and preparation of legal documents for the home loan, as all documents the parties have to sign – including settlement agreements and contracts – should be handled by a legal team.
* Lenders Mortgage Insurance (LMI) - Borrowing more than 80% of the value of your property means the lender will charge you for LMI, a policy that protects the lender in situations when the borrower defaults on the home loan.
There are more costs not listed above ranging from Ongoing Loan Costs, Discharge Fees and Defferment Establishment Costs. You can talk to one of our loan specialists for more information on 02 8313 8400.
Fixed or variable interest rate?
When taking on a loan, it is essential to weigh up the pros and cons of fixed and variable interest rates to decide which suits you.
* A fixed interest rate stays the same for a set period (for example, 5 years). The rate then reverts to a variable interest rate or you can negotiate another fixed rate.
Pros: Makes budgeting easier as you know what your repayments will be and fewer loan features could cost you less.
Cons: You won't get the benefit if interest rates go down and it may cost more to switch loans later, if you're charged a break fee.
* A variable interest rate can go up or down as the lending market changes (for example when official cash rates change).
Pros: More loan features may offer you greater flexibility and It's usually easier to switch loans later, if you find a better deal.
Cons: Makes budgeting harder as your repayments could go up or down. More loan features could cost you more.
Lenders can offer competitive fixed rates for 1-5 years, but then once the fixed period is over, the variable rate it reverts to may not be as competitive. If this happens you may be faced with having the cost and hassle of refinancing to find a better variable rate. When comparing different fixed rate home loans, be sure to include this in the pros and cons of each loan.
What is the best interest loan rate I can get?
There are several questions to consider when weighing up home loan rate options.
How long will I need to take out a home loan for?
What are the best home loan rates? Are they fixed or variable rates?
What will my mortgage repayments be?
Can I make additional repayments?
Are there any added fees to include in my calculations?
Can I sustain a good lifestyle while paying off this mortgage?
Remember that while advice on the best home loans from friends and family might be useful, it shouldn't alone be the sole basis of your home loan decision. You should seek important advice from a mortgage broker who understands you circumstances and financial goals.
To discuss what your loan needs and to determine the best interest loan rate, call us on 02 8313 8400.
What are comparison rates?
The comparison rate is a standardised calculation of the interest rate plus any fees and charges added in. This gives borrowers an initial idea about what the loan will cost them without having to look at the fine print.
The comparison rate was introduced as a way to keep lenders honest and accountable about the true cost of their home loans. It also stops lenders from drawing borrowers in with extremely low interest rates, but then slamming them with large fees without them knowing.
To discuss comparison rates with a home loan specialist, call 02 8313 8400.
What is a property valuation?
A property valuation is a detailed report of a property’s market value.
This is defined by the International Valuation Standards Council as the estimated sale price “between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion”.
A valuation is generally most relevant when you are buying, selling or refinancing a property, or when there is a tax or sale event (such as a divorce or settling an estate) that requires a property to be officially valued.
Each state and territory has different qualification requirements for valuers with the relevant bodies often offering a list for you to search and choose from.
For more information on valuations and, if you require one to be completed, please call us on 02 8313 8400.
How do I get a property report?
Property research reports contain valuable data that can help you make a successful investment decision.
Using the most up-to-date information from CoreLogic, Australia’s leading property data, information, analytics and service provider, our Property and Suburb Reports provide a comprehensive snapshot of a property and its neighbourhood.
To access your property report simply go to our web page www.myfinanceagent.com/property-report
How often am I required to make loan repayments?
The majority of home loan repayments are monthly repayments. However, when making principal and interest repayments, and depending on the bank, you may have the choice to make repayments fortnightly or weekly. Fortnightly repayments are calculated as half of the monthly repayment and weekly repayments are calculated as a quarter of the monthly repayment.
Keep in mind that some lenders put restrictions on the ability to make additional payments.
In addition, some fixed interest rate home loans will only allow you to make additional payments of a pre-agreed annual limit before attracting costs. On the flip side, you can make unlimited additional payments on a variable rate home loan.
What is margin lending or margin loan?
Margin lending supplements your investment equity with extra capital, on credit. It allows you to take a larger position on the share market or in a managed fund, so your profits are compounded (ditto any losses).
For example: If you have $10,000 and take out a margin loan of a further $30,000, you can then invest the full $40,000 and quadruple the value of any gains (less your interest payments). A 10% profit on your share price and dividend over one year would be worth $4000 or 40% of your initial equity.
A benefit of margin lending is the opportunity it provides to increase your investment exposure. Essentially, borrowing allows you access to more funds, giving you the potential to make additional investments you may not have been able to make otherwise. This can magnify market exposures with the potential to increase returns or allow new purchases to diversify your existing portfolio.
Margin lending can also have tax benefits. For example, you may be able to claim the interest on your loan as a tax deduction.